Summary

The global wine market experienced a downturn in 2020, with a 10% decrease in value to US$ 326.6 billion, largely due to the impact of the health crisis. This contrasted the pre-crisis upward trend that saw the market at US$ 364.25 billion in 2019, indicating a significant drop from its earlier growth. Global wine production mirrored this decline with a 12% reduction in volume, producing 258 million hectoliters in 2019, attributed to adverse weather conditions. Despite this, wine consumption remained relatively stable albeit with a slight decrease, reported at 237 million hectoliters in 2019. The UK wine market saw growth in wine bars with industry revenue reaching £836.7 million in 2021, growing faster than the overall UK economy. The market is labor intensive with substantial costs in wages and purchases, and despite the emergence of 1,878 wine bar businesses in 2021, the market remains fragmented with low concentration among players. However, wine bars continue to increase in popularity, influenced by real household disposable income and consumer purchasing power..Title: "Evolving UK Wine Consumer Landscape and Market Dynamics" In recent years, the UK has seen a period of growth in its wine market, riding on the crest of increased wine consumption and an upswing in domestic wine production. The interest in unique and locally produced wines has particularly bolstered the wine bar sector which now accounts for a sizeable market value of between £800 and £900 million as of 2021. This mark of profitability is underscored by a 7.3% growth observed between 2017 and 2020, outpacing the general economy. What's particularly intriguing about the UK wine market is the emerging dichotomy in consumer demographics. Regular wine drinkers aged 65 and over now represent between 25% and 30% of the UK's wine consumers – a significant increase from less than a quarter just five years prior. In contrast, legal drinking age (LDA) consumers aged between 18 and 34 have seen their numbers halve in the same period, now making up roughly a quarter of regular wine drinkers. Part of this shift could be attributed to the pandemic's restrictions, which displaced younger consumers from their usual social wine-drinking settings, prompting a pivot towards other beverage options. The evolving drinking preferences are also reflected in the growing popularity of no- and low-alcohol products, championed by younger demographics who are becoming increasingly health-conscious. This shift is supporting a steady demand in alternative wine packaging formats such as cans, which are endorsed for their convenience and reduced environmental footprint. E-commerce has maintained its foothold in the wine retail space, with supermarkets and wine producers solidifying their online presence, and delivery apps gaining more traction. At the same time, wine bars are diversifying their offerings to attract a variety of consumer segments, ranging from adventurous connoisseurs to budget-conscious social drinkers, each with unique preferences and consumption habits. This move towards segmentation is a strategic response to the overall decrease in the number of regular wine drinkers – from just over 30 million to around 26 million in recent years. While traditional reds, whites, and sparkling wines continue to be mainstays in wine bars, it's the innovators in the UK wine industry who are reshaping the consumer experience. Companies like Defy, with their canned wines, and urban wineries like Renegade are challenging conventions, offering distinctive products that align with contemporary concerns of sustainability and convenience. Despite the rich landscape of wine offerings, the average net profit margin of a UK wine bar hovers at a modest 7.### Key Wine Bar Industry Players in the UK Market As we explore the tapestry of the UK's wine bar industry, it is essential to recognize the pivotal role played by prominent market players who not only shape consumer experiences but also influence industry trends through their unique positioning and offerings. **Davy's Wine Bars**: With its roots deep in London's historic wine culture, Davy's Wine Bars stands out as an esteemed purveyor of fine wines. At Davy’s at St. James, patrons can delve into an exquisite selection of wines ranging from the robust Chardonnay Mâcon Villages from Burgundy to the vibrant Pinot Grigio Zapallares Reserva from Chile. The wine bar's commitment to quality and its embrace of both tradition and innovation make it a celebrated destination for wine enthusiasts. **Humble Grape**: This London-based wine bar and retailer has gained acclaim for its carefully curated selection of international wines. At Humble Grape Battersea, customers can savor the nuanced flavors of unique wines like the Australian Chardonnay from Yarra Valley, showcasing the establishment's dedication to sourcing distinctive wines that cater to the palates of discerning drinkers. **Veeno**: This Italian wine cafe based in Bristol champions the authentic Italian enoteca experience, offering customers a journey through Italy's rich viticultural landscape. Their selection, featuring classics such as a delicate Pinot Grigio and a robust Pinot Noir, encapsulates Italy's storied wine heritage and Veeno's commitment to bringing a slice of Italian wine culture to the UK. **Appellation Wines**: As a beacon of niche and boutique wine selections, Appellation Wines differentiates itself by spotlighting wines from lesser-known regions and smaller producers. With a penchant for the unique and the unsung, they conduct tastings that offer an educational slant, engaging wine lovers in the narrative behind each bottle. **Matthew Clark**: As a titan of the distribution landscape, Matthew Clark supplies a plethora of establishments with an extensive range of alcoholic beverages. Their approach is hands-on and customer-centric, ensuring that from trendy urban wine bars to quaint rural pubs, all have access to a quality selection tailored to their needs. **Renegade Urban Winery**: Embodying the inventive spirit of London's wine scene, Renegade Urban Winery is synonymous with pushing boundaries. By importing quality grapes and producing contemporary wines in the heart of the city, they are redefining what an urban winery can be while their eye-catching bottle designs and renegade attitude invigorate the
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  • Number of pages : 30 pages
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  • Last update : 01/12/2022
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Summary and extracts

1 Market overview

1.1 Definition and presentation

A wine bar is a theme bar focused on oenology. Clients generally have the opportunity to discover some original wines which are not often available for drinking and which are not found in the usual distribution channels.

The global market is stable. There are low barriers to entry, however revenue volatility also remains somewhat low as wine is a non-cyclical drink.

In the UK, the sector has experienced a  period of growth for the period between 2014 to 2021 as wine consumption has risen. On top of this, the domestic production in the UK has gained traction over the last couple of years, which increases interest and demand for this type of wine enjoyed in wine bars.

The Wine Bar market is highly fragmented and characterized by a majority of independent players. This makes differentiation key to succeed in this industry.

Wine bars will continue to grow in popularity. The success of the sector in general, is highly dependent on consumer purchasing power and per capita incomes.

1.2 Global Market

The wine global market was worth US$ ***.* billion in ****, a **% decrease from ****. [***] This decline is mainly related to the health crisis and the trend before the crisis was upward. The turnover in **** was US$ ***.** billion, with a strong increase of **% compared to ****. The global market is expected to grow again to ...

1.3 UK Market

The Wine Bars industry has recorded mixed conditions over the past five years, with revenue increasing strongly over most of the period, but plunging during COVID-** (***)-related lockdowns.

The market size, measured by revenue, of the Wine Bars industry is £***.*m in ****.  The market size of the Wine Bars industry in ...

1.4 Foreign trade of wine

The UN Comtrade database allows us to analyse the foreign wine trade in the UK.

Analysing wine imports and exports shows that Britain is a wine importing country, importing far more wine than it exports. In fact, the trade balance is always largely negative, generating a constant trade deficit. 

Specifically, in ...

1.5 Covid Impact

The covid hit the UK wine bar sector hard; in fact, due to the lockdown all bars were closed for a period of time and even when they reopened they had to suffer restrictions in terms of hours and number of people allowed in.

This is reflected in the industry's numbers ...

2 Demand Analysis

2.1 Wine Consumption

In ****, wine consumption amounted to **.* million hectoliters. For the past fifteen years the volume cleared for consumption has mostly been stable. For the entire period under consideration volumes have been over **.* million hectoliters.The data includes both, wine produced in the UK and wine imported from other countries.  Wine drinkers in ...

2.2 Wine Drinkers

The number of regular wine drinkers in the UK is declining, falling by * million in the past five years to ** million regular wine drinkers. **% of adults are now regular wine drinkers, compared with **% of adults being wine drinkers in ****.

Number of wine drinkers in UK UK, ****-****, in millions Source: ****

Within ...

2.3 Segmentation of wine drinkers

It is interesting to analyze Wine Intelligence' s research that segmented wine drinkers in UK into * categories based on different factors (***)

Adventurous Explorers: Mid-aged and older confident wine drinkers for whom wine is an important part of their lifestyle, who enjoy discovering new wine. A larger segment than in previous years, ...

2.4 Consumer trends

Wine experienced a short-term volume boost in the UK, and although the category will adjust downwards, IWSR market data shows that **** was the first year to see still wine volume growth after more than a decade in decline. There is some evidence that younger legal drinking age (***) wine drinkers are returning ...

2.5 Most popupalar wines in the UK

These are the most popular wine brands in the UK, according to recent approval ratings gathered by YouGov.

While cheap and cheerful Australian and American brands do particularly well, Champagne, at least for special occasions, is also a favourite for the average drinker in the UK. What is especially clear is ...

3 Market structure

3.1 Market Structure

The Wine Bars industry in the UK is labor intensive which means businesses are more reliant on labor than capital. The highest costs for business in The Wine Bars industry in the UK as a percentage of revenue are Wages (***). 

The Wine Bars industry in the UK has low market share ...

3.2 Cost and Profitability of wine bars in uk

Based on the data from the BinWise  portal, we can estimate the average cost of opening a wine bar in the UK and the profit margins, net and gross, that can be made.

How Much Does Opening a Bar Cost?

The average cost of opening a bar is $***,***. The average cost ...

3.2 Value Chain

The value chain and the functioning of the wine market and production and distribution in UK are summarised below. As wine bars are among the distribution outlets of this larger market, their specific value chain is given below:

3.4 Wine bars suppliers: Wine Wholesalers in the UK

Below is an illustrative review of the major UK wine wholesalers.

Appellation Wines

Appellation Wines was opened in Dalry in November **** by Ashton, with the underlying philosophy of stocking wines that cannot be found elsewhere. They champion the smaller producer and the lesser-known wine regions. In January **** they opened their second ...

3.5 Wine Production

This statistic shows the total production volume of wine in the United Kingdom annually from **** to ****. In ****, approximately **,*** hectoliters of wine were produced in the UK. This marked a slight increase from the output of the previous year when around **,*** hectoliters were produced. It is also noticeable that the volume of ...

4 Analysis of the offer

4.1 Different types of wine

Below we have provided an illustration of the main categories of wine found in the UK. Within these categories fall the vast majority of wines sold in the UK. 

Red wines are made from black grapes fermented with the grape skins (***), seeds, and stems. Red wine is high in tannins, which ...

4.2 Price Analysis

Below we have provided an illustration of the prices of the main wine categories in * major UK wine bar chains.   We have referred to prices for a glass of wine (***).

4.3 Leading wine brands by sales revenue in the UK

As of ****, the leading brand of wines by sales in the United Kingdom was Hardys. Hardys generated just over *** million British pounds in the sale of wine that year. The leading competitor, I Heart, had earned approximately **.* million British pounds in wine sales.

Leading wine brands by sales revenue in the ...

4.4 Supply trends: Innovation

In the UK wine industry, more and more companies are being formed that focus on product and process innovations in order to achieve higher quality, more sustainable products more quickly.

One UK business which embodies much of this thinking and is literally repackaging how we drink and think about wine is Defy, ...

5 Regulations

5.1 Regulations

In England and Wales, the Licensing Act **** is the legislation used to license premises in their sale of alcohol. It forms the backbone of UK alcohol laws and sets the laws that any business selling alcohol must follow, including which licenses they need to apply for and what they must do ...

6 Positioning of the players

6.1 Segmentation

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Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Vagabond
Davy's
Veeno
Humble Grape
Farr Vintners Ltd
Liberty Wines
Moët et Chandon (Groupe MHCS / LVMH)
Gruppo Caviro

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